IP/06/204
\nBrussels, 22nd February 2006
\nCommitments entered into by De Beers to end purchases of rough diamonds\nas of 2009 from ALROSA, the world's second largest producer, have been\nrendered legally binding by a formal decision adopted by the European\nCommission. Following a phasing out from 2006 to 2008, De Beers undertakes to\nrefrain from all purchases of rough diamonds from ALROSA. This will result in\nmore rough diamonds being available on the open market, paving the way for\ngenuine competition in the supply of rough diamonds. The Commission had been\nconcerned that the practices of De Beers may have violated EC Treaty rules on\nabuse of dominant market positions (Article 82) but has now closed the case in\nthe light of the commitments submitted by De Beers.
\nCompetition Commissioner Neelie Kroes commented: “For the first time in\nthe history of the diamond market there is an opportunity for genuine\ncompetition. De Beers' long-running primacy can now effectively be\nchallenged by its biggest competitor, ALROSA. The Commission's decision\nfrees up a viable alternative source for supply of rough diamonds, which will\nultimately benefit consumers.”
\nDe Beers, based in South Africa, whose registered office is in Luxembourg, is\na global operator primarily active in the production and supply of rough\ndiamonds.
\nALROSA is a Russian company mainly specialising in the production of rough\ndiamonds.
\nFor much of the 20th century De Beers held an unrivalled position\nin the diamond market. Its grip over alternative sources of supply will now be\nbroken. This creates a new opportunity for competition in the world-wide rough\ndiamond market.
\nThe commitments offered by De Beers relate to its purchases of rough diamonds\nfrom ALROSA and provide for the termination of purchases from ALROSA as of 2009\nafter a phasing out period from 2006 to 2008. During this period, De\nBeers' purchases of rough diamonds from ALROSA will decrease from US$ 600m\nin 2006 to US$ 500m in 2007 and US$ 400m in 2008. This is approximately\nequivalent to a decrease from €500m in 2006 to €420m in 2007 and\n€340m in 2008.
\nA monitoring Trustee will supervise compliance with these commitments. The\ntext of the commitments, the Trustee Mandate and the Trustee's contact\ndetails will be published on the Commission's and De Beers'\nwebsites.
\nThe Commission decision, based on Article 9 of the procedural Regulation\n(1/2003) for the implementation, in the present case of Article 82 (abuse of\ndominant position) of the Treaty, takes into account the result of consultations\non the commitments offered by De Beers (see
The Commission has received a number of complaints against De Beers'\nSupplier of Choice distribution system for rough diamonds (see
See also